The Shopper’s Friend
After banking and insurance, which businesses yield to the lure of high-speed automatic data-processing? Department stores are dabbling, and supermarkets too are beginning to use the computer. The A & P stores are studying such a system, as is the Liggett Drug Company. At first the computer looked attractive as an inventory and ordering tool; now it is headed in the direction of automating the actual shopping operation.
In Paris, a retail grocer made merchandising history by displaying more than 3,000 different items in a floor space of only 230 square feet. The trick is in a punched-card system that automatically registers and prices any item the buyer selects. At the check stand the card is run through a computer which figures the bill and orders the groceries, which are automatically selected from the warehouse and delivered in a cart to the purchaser at the door!
A similar automatic supermart system is being pushed by Solartron—John Brown, Ltd., in England. The computerized scheme works much like the French one. The shopper inserts a card in the slot beside the item she wants and a punch marks it in alpha-numeric code for item and price. If more than one item is desired the card is reinserted. With each punch, the machine slices off a bit of the edge of the card so that it slides deeper into the slot next time. At the cashier’s station, the card is placed in a computer. Fifteen seconds after she has paid for them, the shopper is delivered her groceries. Besides the saving in time for the shopper, there is a saving for the grocer in floor space and also the elimination of the loss through shoplifting. About the only thing that might seem to be against the new system is the psychology of the large display, which motivation researchers tell us stimulates volume buying.
With this factor in mind, an official of Thompson Ramo Wooldridge, Inc., has suggested retaining the large stocks on display, but coding them with fluorescent paint of certain wavelengths to correspond to price. The shopper fills her cart even as in the conventional store, but at the mechanized checkstand an electronic eye on the computer scans and prices the items while they are being automatically packaged. The doubting Thomases say of this system that the packager will probably put the eggs on the bottom, along with the tomatoes and ice cream!
The advertising journal Commercial Art comments sadly on this accepted fact of automation in the market place:
The checkout clerk is doomed, that last survivor of human warmth in most of today’s supermarkets. His eventual executioner will be the electronic computer, of course. Pilot systems using computers for automatic checkouts are already drawing a bead on the jovial little man in the green smock. Eventually even he will disappear from the faceless canyons of our sleek supermarkets.
But the writer finds a ray of hope in the conclusion of his editorial.
Skilfully designed packages can strike an emotional chord in the consumer, can create strong brand preferences even in the absence of product differences. Supermarkets can give the appearance of being a friendly, “human” place to shop even if the only humans visible are the customers.
To make more complete the rout of conventional merchandising by the computer-oriented system is the plan to automate even the trading stamp. American Premium Systems, Inc., a Texas firm, is developing a plan in which the customer receives a coded plastic card instead of a stamp book. When he makes a purchase, a card is punched with the number of credits he has earned. By means of a centralized computer, an IBM 1401 in this instance, records are kept continuously, and when the customer has accrued 1,500 points he receives a premium automatically. The obvious advantage here is to the customer, who is spared the messy task of licking thousands of evil-tasting multicolored stamps, and the danger of losing the book before redemption. But the storekeeper profits too. He does not risk the loss or theft of stamps, nor does he buy stamps for people who are not going to save them. The complete system will call for an IBM 7074 and represents an outlay of about $3 million to service some 6 million customer accounts.
Before leaving the area of merchandising, it might be well to mention inventory management in general and the effect of the computer upon it. Applying what is known as “conceptual order analysis,” one marketer who is using computers in his business talks of “warehousing without bricks or mortar.” With a confidence born of actual testing, his firm expects one day to have no inventory except that on his production lines or in transit to a customer. This revolutionary idea is based on practically instantaneous inventorying, production ordering, and delivery scheduling. While the warehouse without bricks or mortar is not yet a fact, research discloses many manufacturers who have already cut their standing inventories, from small amounts to as much as 50 per cent, while maintaining customer service levels. This was done using what by now are “standard” electronic information-handling methods. The implication here is of the computer not merely as a data-handler, but as a business organizer and planner as well.